The U.S. Department of the Treasury’s Financial Crimes Enforcement Network, jointly with the Federal Deposit Insurance Corporation, Office of the Comptroller of the Currency, and National Credit Union Administration and in coordination with the Internal Revenue Service, has issued an advisory warning financial institutions about identity theft, payroll tax fraud, and related money laundering tied to the unlawful employment of non-work-authorized individuals. The advisory asks firms to strengthen detection and Suspicious Activity Report filing around schemes in which complicit employers and labor brokers use the U.S. financial system to conceal off-the-books payroll, evade taxes and workers’ compensation obligations, and move wages to unauthorized workers. FinCEN says these schemes are seen in agriculture, construction, domestic service, hospitality, and other industries and often involve shell companies or unregistered money services businesses opened with foreign identity documents or Individual Taxpayer Identification Numbers, checks from employers for purported services, and payments to workers through cash couriers, checks, or peer-to-peer platforms without payroll tax withholding. In 2025, financial institutions reported more than USD 2.5 billion in suspicious activity associated with these payroll tax fraud schemes. The advisory provides 18 red flag indicators and asks institutions to use the term FINANCIALINTEGRITY-2026-A002 in SAR field 2 and the narrative when reporting related activity. It also encourages banks to treat the use of an ITIN in place of a Social Security number or valid employment authorization document as a potential risk factor in risk-based customer due diligence.
U.S. Department of the Treasury2026-06-05
U.S. Department of the Treasury's Financial Crimes Enforcement Network issues joint advisory on unlawful employment schemes and highlights USD 2.5 billion in 2025 suspicious activity
The U.S. Department of the Treasury’s Financial Crimes Enforcement Network, with U.S. banking regulators and the IRS, issued an advisory warning financial institutions about identity theft, payroll tax fraud, and related money laundering tied to unlawful employment of non-work-authorized individuals. It urges enhanced detection and Suspicious Activity Report filings on schemes involving shell companies, unregistered money services businesses, and off-the-books payroll flows, and notes over USD 2.5 billion in related suspicious activity in 2025. The advisory provides 18 red flags, prescribes using FINANCIALINTEGRITY-2026-A002 in relevant SARs, and flags use of an Individual Taxpayer Identification Number instead of a Social Security number or valid work authorization as a customer due diligence risk factor.